Extreme Weather Events and Economic Activity: The Case of Low Water Levels on the Rhine River

Ademmer Martin, Jannsen Nils and Saskia Meuchelböck
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Ademmer Martin: Bloomberg LP, Neue Mainzer Str. 75, 60311 Frankfurt am Main, Germany
Jannsen Nils: Kiel Institute for the World Economy, Kiellinie 66, 24105 Kiel, Germany

German Economic Review, 2023, vol. 24, issue 2, 121-144

Abstract: We make use of historical data on water levels on the Rhine river to analyze the impact of weather-related supply shocks on economic activity in Germany. Our analysis shows that low water levels lead to severe disruptions in inland water transportation and cause a significant and economically meaningful decrease of economic activity. In a month with 30 days of low water, industrial production in Germany declines by about 1 percent, ceteris paribus. Our analysis highlights the importance of extreme weather events for business cycle analysis and contributes to gauging the costs of extreme weather events in advanced economies.

Keywords: climate; extreme weather events; supply shocks; business cycle effects; transportation disruption (search for similar items in EconPapers)
JEL-codes: E32 Q54 (search for similar items in EconPapers)
Date: 2023
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Working Paper: Extreme weather events and economic activity: The case of low water levels on the Rhine river (2020)
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DOI: 10.1515/ger-2022-0077

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